By SANDY SHORE, Associated Press
Prices for corn and soybeans hit all-time highs Thursday as questions built about the extent of damage to the crops from the merciless summer heat.
Corn for September delivery rose 12.75 cents to finish at $8.0775 per bushel, besting its all-time high of $7.87 per bushel set in June 2011. August soybeans gained 50.25 cents, or 3 percent, to end at $17.3375 for a second straight second record-setting day.
Supplies of both crops are tight globally and that may not improve much after this year's U.S. harvest. Crop conditions continue to degrade in the blistering heat and there is little to no rain in forecasts at least through the end of the month.
Many analysts are predicting that corn yields could fall to 140 bushels per acre or even lower as the heat continues with little relief.
Farmers raised hopes for a bountiful harvest by planting 96.4 million acres of corn this spring, the highest number of acres since 1937. Those hopes evaporated by mid-June as the heat took hold.
Nearly 40 percent of the corn crop was in poor-to-very-poor condition as of Sunday, according to the U.S. Agriculture Department. That compared with just 11 percent a year ago.
"The crop, if you look going south from Illinois and Indiana, is damaged and a lot of it is damaged hopelessly and beyond repair now," said Sterling Smith, a Citibank Institutional Client Group vice president who specializes in commodities.
About 30 percent of the soybean crop was in poor-to-very-poor condition, which compared with 10 percent a year ago.
Conditions for both crops are expected to worsen in Monday's agriculture agency report.
The resulting record high prices have begun to cut into demand, said Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC. "The higher we go now, the harder it will be on the demand for the longer term, in my view," he wrote in an email.
Corn for December delivery, which was the most active contract, fell 5.75 cents to finish at $7.785 per bushel. November soybeans, also the most active, rose 32.25 cents to $16.5225 per bushel and September wheat rose 31.75 cents to $9.35 per bushel.
In other trading, oil prices climbed as tensions rose in the Middle East. There are concerns that Iran will try to block a waterway crucial for daily oil shipments.
Benchmark oil rose $2.79, or 3.1 percent, to finish at $92.66 per barrel in New York. Heating oil rose 6.94 cents to $2.947 per gallon, wholesale gasoline gained 5.55 cents to $2.9389 per gallon. Natural gas ended up 2.6 cents at $2.999 per 1,000 cubic feet.
Other commodities were mostly higher as the dollar grew weaker against other currencies. Commodities are priced in dollars so a weaker dollar makes them more of a bargain for traders who use other currencies.
Copper for September delivery rose 6.05 cents to finish at $3.5345 per pound, October platinum gained $18.90 to $1,423.10 and September palladium ended up $7.30 at $584.85 an ounce.
August gold increased $9.60 to end at $1,580.40 and September silver gained 12.2 cents to $27.217 per ounce.
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